MGMT E2

Overview of Agency Relationships

Employees and Independent Contractors

  • Definitions:

    • Agent: authorized by the principal to make contracts with third persons on behalf of the principal.

    • Principal: employs an agent to act on their behalf; maintains liability to third parties.

Nature of Agency Relationship

  • Consent-Based: agency relationship is typically consensual, established through agreement.

  • Types of Agents:

    • Special Agent: performs specific acts.

    • General Agent: transacts all affairs in a business type.

    • Universal Agent: has broad authority to act on the principal's behalf.

Creating an Agency

Methods

  • Appointment: express authorization; can be oral or written (e.g., power of attorney).

  • Conduct: actions of the principal create an appearance of agency (apparent authority).

  • Ratification: principal accepts actions of an unauthorized agent.

Agent's Authority

Scope of Authority

  • Express Authority: explicitly given by the principal.

  • Incidental Authority: acts necessary to execute express authority (e.g., purchasing goods on credit).

  • Customary Authority: behaviors typical in a trade or area of business.

  • Apparent Authority: arises when a third party reasonably believes an agent has authority based on principal's representations.

Duties and Liabilities of Principal and Agent

Agent's Duties

  • Duty of Loyalty: must act in the principal's best interest; no secret benefits from the agency.

  • Duty of Care: act with the competence and diligence a reasonable agent would exercise.

  • Duty to Inform: keep the principal informed about matters related to the agency.

Principal's Duties to Agent

  • Compensation: payment for the agent’s services and reimbursement for expenses.

  • Protection: protect agents from third parties and wrongful termination.

Termination of Agency

Methods

  • Mutual Agreement: both parties agree to terminate.

  • Operation of Law: factors such as principal's death, bankruptcy, or incapacity.

  • Disability: under UDPAA, durable powers can persist despite principal's incapacity.

Employment Law Regulations

Employment-at-Will Doctrine

  • Employees can be terminated for any reason or no reason, unless exceptions under public policy apply.

Whistleblower Protections

  • Sarbanes-Oxley Act: protects employees against retaliation for reporting corporate fraud.

  • Dodd-Frank Act: extends protections and provides monetary incentives for whistleblowers.

Equal Employment Opportunity (EEO) Regulations

Title VII of the Civil Rights Act of 1964

  • Prohibits employment discrimination on the basis of race, color, religion, sex, or national origin.

  • Disparate Treatment: evidence of intentional discrimination.

  • Disparate Impact: neutral practices that adversely affect protected classes must be justified.

Additional Protections

  • Equal Pay Act: mandates equal pay for equal work, regardless of gender.

  • Age Discrimination in Employment Act (ADEA): protects against age discrimination for those over 40.

  • Americans with Disabilities Act (ADA): prohibits discrimination against disabled individuals; requires reasonable accommodations.